Omrix is expected to operate as a stand-alone entity reporting through Johnson & Johnson's Ethicon subsidiary, a provider of suture, mesh, hemostats for surgery. In a statement Monday, Johnson & Johnson said the acquisition provides Ethicon with an "opportunity to strengthen its presence in active, biologic-based hemostats and convergent products for various surgical applications. "
Under the terms of the agreement, Johnson & Johnson will begin a tender offer to Omrix shares for $25 each. The tender offer is expected to close by the end of December.
Shares of Omrix closed Friday at $21.16.Robert Taub, Omrix's CEO, and entities he controls, have agreed to tender about 16% of Omrix's outstanding shares to the tender. If the deal closes in 2008, Johnson & Johnson said it expects to incur a one-time, after-tax charge of about $120 million from the write-off of in-process research and development charges. Johnson & Johnson said the acquisition is expected to be breakeven to slightly dilutive to its 2009 per-share earnings. Ethicon currently has exclusive distribution rights in the U.S. and the European Union for two active, biologic-based hemostats manufactured by Omrix. The companies also are partners on a separate surgical product which is in Phase II trials.